The International Monetary Fund (IMF) reports that the global economy is slowing as countries adapt to new trade tariffs, tighter fiscal policies, and shifting economic conditions.

In its World Economic Outlook released on October 14, 2025, the IMF projects global growth to ease from 3.3% in 2024 to 3.2% in 2025, and 3.1% in 2026. Although this is a slight upward revision from the April forecast, it signals a gradual loss of momentum worldwide.

The IMF notes that some of the impact from higher tariffs has been softened by new trade deals and short-term boosts earlier this year. However, these supports such as companies rushing exports before new tariffs took effect are now fading.

Advanced economies are expected to grow by about 1.5%, while emerging and developing markets are set to expand just above 4%, supported by strong domestic demand in Asia and Latin America. Inflation continues to ease, though it remains above target in the United States and relatively low elsewhere.

The IMF warns that downside risks remain, citing policy uncertainty, rising protectionism, and possible disruptions to labor supply. Fiscal weaknesses and market volatility could also challenge financial stability.

To sustain growth, the Fund urges governments to rebuild fiscal buffers, protect central bank independence, and implement structural reforms that strengthen business confidence and long-term resilience.

Source: Citi Newsroom